This is the simplest method for claiming your motor vehicle deductions if you travel 5,000km or less in a financial year. The allowable tax deduction is calculated by multiplying the work kilometres by a set rate per kilometre. The applicable rate is dependent on the engine capacity of the car.
This rate has remained unchanged for the last 5 years so it is a welcome change with the increasing costs of fuel.
Here is a table depicting the old and new rates:
These are also the rates used by most employers when reimbursing km’s travelled by employees so it is important to review what rates your employer is using for this reimbursement. For the 2013/14 year the government has increased the cents per km rates for motor vehicle deductions.